Calgon Carbon Announces Second Quarter Results
PITTSBURGH, Aug. 5 /PRNewswire-FirstCall/ — Calgon Carbon Corporation (NYSE: CCC) announced results for the second quarter ended June 30, 2009.
The company reported net income of $6.1 million for the second quarter of 2009, as compared to net income of $12.7 million for the second quarter of 2008. Net income for the second quarter of 2008 consisted of income from continuing operations of $9.3 million and income from discontinued operations of $3.4 million, which represents the final adjustment to the sale price of the company’s charcoal business that was sold in the first quarter of 2006. On a fully diluted basis, net income per common share for the second quarter of 2009 was $0.11, as compared to $0.24 for the second quarter of 2008, which consisted of $0.18 from continuing operations and $0.06 from discontinued operations.
Income from operations for the second quarter of 2009 was $10.2 million, versus $16.1 million for the comparable period in 2008.
Net sales for the second quarter of 2009 were $103.1 million, a 5.0% decline as compared to record quarterly sales of $108.5 million for the second quarter of 2008. The decline was attributable to the comparably strong U.S. dollar, which resulted in a $6.0-million negative impact on sales from currency translation, and lower demand for certain activated carbon and service products due to the global economic slowdown. Markets that were appreciably affected by the decline in demand included: potable water, environmental water treatment, industrial processes, and food. The sales decline was partially offset by favorable pricing in certain markets.
In the second quarter of 2009, equipment sales increased 5.4% versus the comparable period in 2008 due to higher revenue from ultraviolet systems. Consumer sales were comparable to the second quarter of 2008.
Net sales less the cost of products sold as a percentage of net sales for the second quarter of 2009 was 31.8% versus 34.5% for the second quarter of 2008. The decline was primarily due to a shift in sales mix, as well as increased plant and maintenance costs which were partially offset by favorable pricing for equipment and certain activated carbon and service products.
Selling, administrative and research expenses for the second quarter of 2009 increased 8.6% versus the second quarter of 2008, principally due to higher employee-related costs, primarily pension expense, and an increase in bad debt expense.
Interest expense was $0.1 million for the second quarter of 2009 as compared to $1.6 million for the comparable period of 2008. The change is due to the lower amount of debt outstanding during the second quarter of 2009 as a result of the company redeeming $69.0 million of its 5% Senior Convertible Notes in the second half of 2008.
In the second quarter of 2009, other expense was $1.5 million as compared to $0.5 million for the second quarter of 2008. Financing fees of $0.8 million related to the company’s former credit facility were written-off.
Calgon Carbon’s board of directors did not declare a quarterly dividend.
Net income for the six months ended June 30, 2009 was $12.1 million versus $23.1 million for the comparable period of 2008. Net income for the first half of 2008 included a non-recurring after-tax gain of $5.7 million, or $0.11 per common share from the settlement of a lawsuit and a non-recurring after-tax gain of $3.4 million related to the sale of the company’s charcoal business. Fully diluted net income per common share for the first half of 2009 was $0.21, all from continuing operations. Fully diluted net income per common share for the first half of 2008 was $0.45, which consisted of $0.38 from continuing operations and $0.07 from discontinued operations.
Income from operations for the six months ended June 30, 2009 was $19.1 million as compared to income from operations of $33.7 million for the first half of 2008. This included the $9.3 million non-recurring gain ($5.7 million after tax) mentioned above.
Commenting on the results, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, said, “Revenue was impressive, particularly since there was a significant decline in volume during the quarter. In fact, excluding the negative impact of foreign exchange translation, sales for the second quarter of 2009 slightly exceeded the quarterly sales record achieved in the second quarter of 2008.”
“Since volume was down in the second quarter, we took the opportunity to address needs at our plants that were created by last year’s intense demand for our activated carbon products. The costs associated with these maintenance efforts had a significant negative effect on margins in the second quarter. However, when the work is completed, we will be extremely well positioned to take advantage of increased demand when the economic recovery occurs.”
Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner.
This news release contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believe,” “estimate,” “anticipate,” or similar words indicating that future outcomes are uncertain. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in the company’s most recent Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to be materially different from any future performance suggested herein. Further, the company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the company’s control. Some of the factors that could affect future performance of the company are higher energy and raw material costs, costs of imports and related tariffs, labor relations, capital and environmental requirements, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this news release, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in the company’s most recent Annual Report.
Calgon Carbon Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands except per share data)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008* 2009 2008*
---- ---- ---- ----
Net Sales $103,090 $108,476 $193,723 $198,807
-------- -------- -------- --------
Cost of Products Sold 70,319 71,021 131,533 132,786
Depreciation and Amortization 3,972 4,199 7,748 8,125
Selling, Administrative & Research 18,626 17,154 35,333 33,445
Gain from AST Settlement - - - (9,250)
- - - ------
92,917 92,374 174,614 165,106
------ ------ ------- -------
Income from Operations 10,173 16,102 19,109 33,701
Interest Expense - Net (109) (1,644) (3) (3,299)
Other Expense - Net (1,500) (480) (1,928) (570)
------ ---- ------ ----
Income From Continuing
Operations Before Income
Tax and Equity in Income
(Loss) from Equity Investments 8,564 13,978 17,178 29,832
Income Tax Provision 2,893 4,555 5,974 10,474
----- ----- ----- ------
Income from Continuing
Operations Before Equity in
Income (Loss) from
Equity Investments 5,671 9,423 11,204 19,358
Equity in Income (Loss)
from Equity Investments 427 (139) 868 299
--- ---- --- ---
Income from Continuing Operations 6,098 9,284 12,072 19,657
Income from
Discontinued Operations - 3,447 - 3,447
- ----- - -----
Net Income $6,098 $12,731 $12,072 $23,104
====== ======= ======= =======
Net Income per Common Share
Basic:
Income from
Continuing Operations $.11 $.23 $.22 $.49
Income from
Discontinued Operations $- $.09 $- $.08
-- ---- -- ----
Total $.11 $.32 $.22 $.57
Diluted:
Income from
Continuing Operations $.11 $.18 $.21 $.38
Income from
Discontinued Operations $- $.06 $- $.07
-- ---- -- ----
Total $.11 $.24 $.21 $.45
Weighted Average Shares
Outstanding (Thousands)
Basic 54,331 40,559 54,225 40,400
Diluted 56,285 52,025 56,183 51,891
* Results have been retrospectively adjusted to incorporate the adoption
of FASB Staff Position APB 14-1, "Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement)" .
Calgon Carbon Corporation
Segment Data:
-------------
Segment Sales 2Q09 2Q08 YTD 2009 YTD 2008
------------- ---- ---- -------- --------
Activated Carbon and Service 89,383 95,284 167,146 172,182
Equipment 11,327 10,742 22,226 20,439
Consumer 2,380 2,450 4,351 6,186
----- ----- ----- -----
Total Sales (thousands) $103,090 $108,476 $193,723 $198,807
Segment
Operating Income (loss)* 2Q09 2Q08 YTD 2009 YTD 2008
------------------------ ---- ---- -------- --------
Activated Carbon and Service 13,200 19,766 25,082 37,142
Equipment 962 519 1,937 3,962
Consumer (17) 16 (162) 722
--- -- ---- ---
Income from Operations (thousands) $14,145 $20,301 $26,857 $41,826
*Before depreciation and amortization. The YTD 2008 period includes the
$9.3 million gain on AST settlement ($5.3 million Activated Carbon and
Service and $4.0 million Equipment).
Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
June 30, December 31,
2009 2008*
---- ----
ASSETS
Current assets:
Cash and cash equivalents $7,501 $16,750
Restricted cash 11,019 -
Receivables 65,548 64,515
Inventories 94,441 93,725
Other current assets 23,292 25,598
------ ------
Total current assets 201,801 200,588
Property, plant and equipment, net 143,774 122,960
Other assets 59,781 63,714
------ ------
Total assets $405,356 $387,262
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $- $1,605
Current portion of long-term debt 5,163 7,903
Other current liabilities 54,577 56,036
------ ------
Total current liabilities 59,740 65,544
Long-term debt 7,600 -
Other liabilities 69,683 68,441
------ ------
Total liabilities 137,023 133,985
Total shareholders' equity 268,333 253,277
------- -------
Total liabilities and shareholders'
equity $405,356 $387,262
======== ========
* Results have been retrospectively adjusted to incorporate the
adoption of FASB Staff Position APB 14-1, "Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)".
SOURCE Calgon Carbon Corporation
